The Impact of Foreclosures on Renters

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Much has been said about the dire situation many homeowners face as they risk foreclosure. Although a housing rebound may be close, families continue to lose their homes. Another group being affected by the foreclosure crisis are home renters whose landlords were unable to keep their investment properties. Sometimes there is ample warning for a renter who needs to relocate, and sometimes the foreclosure comes as a surprise when the landlord neglects to share the situation with the tenant.

Matt Malouf shares the impact foreclosure have on the renters:

“If you are a renter living in a property that is facing or is in the middle of foreclosure proceedings, you may not know what to do or where to turn. For you, it may seem like you are at the end of your rope. When facing foreclosure, many renters will simply just cut their losses and relocate. This may mean having to move without recouping a security deposit. Unfortunately, there are some renters, possibly you, who cannot up and afford to relocate, especially without getting your security deposit back. When renting a new apartment, most landlords require a security deposit and if you weren’t prepared to move, you may not have the money. There is another serious issue that renters forced to relocated are facing. Foreclosures are on the rise. What does this mean? It means that an unprecedented number of homeowners have no place to live. This often turns them into renters. Unfortunately, this lessens the availability and rental choices for renters, like yourself. It may mean that you have to pay more in rent or move to another city or town.”

Malouf recommends that renters be prepared to relocate with enough money saved for a security deposit for a new location, just in case the original deposit is kept. However, if a renter is being forced to relocate, and they have some money saved, maybe buying is their best option. With affordability at a record high, the gap between renting and owning has gotten substantially smaller, making buying a more viable option.

Click through to read Matt Malouf’s full post.

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